Johannesburg - While chartered accountants are highly sought-after, the carrot dangled is not always enticing enough to woo every novice in the business.
Like many of his colleagues at the time who were finishing their articles at a major auditing firm in December 2012, he was assured of a cushy job with a blue-chip company in January 2013, but Peterson Khumalo did not take it. His eyes were fixed on the bigger picture.
With a partner, also a rookie, they decided to go on their own and start their firm. But the next six months as partners of their new outfit would be angst-ridden, with doubts about the wisdom of leaving their well-paid jobs. The demands of life and financial commitments would see not just one, but two successive partners opt out of Khumalo & Mabaya Chartered Accountants to go back to the usual fringe benefits of a corner office and fat cheques as employees.
Khumalo stayed the course and 10 years later, the company has offices in Joburg, Durban and Cape Town and employs just over 40 people with a R50m annual turnover. There is a southern African footprint that is already being established with partners in Zambia.
Khumalo (37) is the first to admit that it was not always easy.
But watching one Sizwe Nxasana was enough to spur the young man on.
“I had the pleasure of sharing a conversation with him.” Nxasana is from Clermont in Durban while Khumalo hails from Hammarsdale and because the former was also among the pioneers who built their firm “he is the S in Sizwe Ntsaluba Gobodo”, Khumalo thought he would not be a bad path to traverse as well.
“We had quite a lot of similarities. He’s done it. He’s at the pinnacle of the industry. I can do it.”
Like Nxasana, their alma mater is the University of Zululand. Khumalo would do his Masters at the University of Johannesburg.
“There have been a lot of these black leaders opening up the industry for us,” he says. He looks at this as a relay, with his generation taking over the baton from the Nxasanas and Gobodos, Khumalo says.
The former KPMG trainee rejected two offers, one from Treasury and M-Net while doing his articles. “Lucrative offers”, he calls them but he thought building from scratch was the way to go.
“Let’s build our institutions. We had seen (at the time), how the majority of our people had not enjoyed their stay at these prestigious firms. We thought, "Let's create our vehicle.”
There’s still quite a few of us, he says of CAs in the country. He hopes in the coming years, changes will be rung in and there will be more women.
“Am I where I want to be now? No. Am I where I’m supposed to be? Yes. Where we are and where we started are Venus and Mars.”
He thinks back on how peers who had accepted offers lived a lifestyle different from his and his partner’s. They had rent issues. Luckily, they had created a good relationship with the landlord.
“Things will turn around. We will pay the rent,” he says, thinking about how they persuaded their landlord to let them stay.
Many times, the struggle made “me think this entrepreneur thing wasn’t for me”.
Only by month five did they “score a small job”. He says: “If I had a house then, it would have been repossessed. My car was close to being paid off."
But, he says: “It’s been an exciting journey. It teaches you commitment.”
Fast-forward to today, the firm employs seven HODs, overseeing divisions such as audit, taxation, advisory, capital raising, etc.
They created the 5am Club with his partners. “Start at 5, go to the gym, work and close off everything at 10 pm. Tomorrow morning start the same thing all over again,” Khumalo remembers. But they kept the weekend sacrosanct for the family.
They are not up there with the big boys, he says modestly. “But we’re punching the same bag with them." They are a small firm but employ a young, tech-savvy workforce.
“We do things as they are done to date. We use technology. We do not need to go to the golf course to forge business relationships. There are apps for that. We use what is available now.”
A quote by the CEO of Nokia, in his last speech, comes to mind: “We did not do anything wrong.”
“They relied on their age. They did not move with the times and the technology. They forgot that the world has changed. They could not keep up with Apple and the likes."
Khumalo & Mabuya works with the Auditor-General who will assign them different departments to service.
“We have over 140 SMMEs we work with in different sectors." They do a lot of corporate funds, from Exxarro, Telkom, Barlow World, etc.
A new deal they have clinched will bring an $80bn fund to South Africa, Khumalo says. It is this work that is taking him to Denmark in two weeks.
On the IT side, business is booming, he says.
Transactional Advisory is the future of their business. The capital-raising side is the biggest, he says.
“We‘ve got guys in Denmark, UAE, Netherlands (working with us). We have secured a CAT 2 license, where funders will put money into a fund to finance projects.”
For Khumalo & Mabuya, there are lessons to be drawn from the scandals of the big auditing firms in the Gupta corruption saga. “Always draw a line. There is something called ‘professional judgment’. You know when you’re about to do something wrong. In our industry, as CAs, we’re guided by such principles as integrity, objectivity and accountability."
don.makatile@inl.co.za